Biomass energy consumption and economic growth: insights from BRICS and developed countries.

Abstract

This study analyzes the causal associations between economic growth (GDP) and biomass energy consumption (BIO) in the US, UK, and BRICS countries for the period 1990 to 2020 in time-frequency space. The use of wavelets is what distinguishes our approach, i.e., cross wavelet transform, wavelet coherence, and the wavelet-based Granger causality method proposed by Olayeni (2016), which quantifies the causal associations in the time-frequency space. The results uncover that the causal relationships between GDP and BIO are not uniform across time and frequency. In fact, there is a positive relationship between GDP and BIO indicators in the BRICS countries in the medium and long term and in the USA and UK in the short term throughout the research period. In addition, a bidirectional causal effect between GDP and BIO exists in China, Brazil, and India, while there is no long-run causal relationship between GDP and BIO in India and South Africa. The causal impacts of economic growth on biomass energy usage are more pronounced in these countries than in the opposite direction, especially over longer time horizons. The key conclusion is that these countries should boost their biomass energy consumption to promote economic growth and reduce energy reliance.